Cuba cannot afford its energy or oil: the regime is sinking without external subsidies.

Before 1959, when Cuba had a strong sugar production and also exported various manufactured goods, the country generated enough foreign currency revenue to finance all of its oil imports. The trade balance was positive, and the Cuban peso maintained parity with the US dollar.

Today, the situation is different; Cuba is facing a crisis that cannot be explained solely by temporary shortages, sanctions, or poor management. The problem is deeper and structural: the numbers simply do not add up.

Cuba's minimum oil bill—around $2.5 to $3 billion annually—doubles everything that its economy produces when measured in real dollars. Without subsidies from the Soviet Union, Venezuela, or any other external patron, the Cuban economic model is mathematically unviable. This is not a political opinion; it is a conclusion drawn from cross-referencing three sets of public data—energy consumption, international oil prices, and GDP at market exchange rates. The numbers leave no room for alternative interpretation.

When Cuba produced sugar and other manufactured goods before 1959, it could finance all its oil purchases abroad, and the trade balance was positive with the dollar at parity with the peso.

1. Cuánto petróleo necesita Cuba y cuánto cuesta

The EIA (U.S. Energy Information Administration) series via IndexMundi and TheGlobalEconomy documents Cuba's total oil consumption since 1980. The latest official figure is 178,000 barrels per day (kbd) in 2014, equivalent to 65 million barrels per year. Since then, there has been no continuous official series.

But the Cuban economy has contracted by an accumulated 11% between 2020 and 2024 (Infobae, July 2025; SWI/EFE). Electricity generation fell from 20.7 TWh in 2019 to 15.3 TWh in 2023 (Low Carbon Power). If historical consumption is adjusted for this contraction, a reasonable estimate of the current minimum energy needs is between 110-120 kbd, or 40-45 million barrels per year. This is not a scenario of abundance: it is the minimum required to avoid the permanent collapse of the electrical system and transportation.

Cuba does not produce anywhere near that amount. Domestic crude oil production has been declining for ten years and in 2024 was around 32,000 bpd (Statbase; Worldometer), barely 11.7 million barrels per year. The difference — 28-33 million barrels annually — must be imported.

At market prices for 2025-2026 (Brent ~$60-70/barrel; EIA STEO; Trading Economics), adding a freight cost of $2-4/barrel for risk premiums and Caribbean logistics (Argus Marine Fuels), the import bill is calculated as follows:

2. The Cuban GDP measured in real dollars

The latest official data from the ONEI places the Cuban GDP at current prices at 633.442 million Cuban pesos (CUP) for 2022. In 2023, the GDP contracted by 1.9% and in 2024 by another 1.1%, marking five years of deterioration (Infobae). The Center for Cuban Economy Studies (CEEC) estimates an additional decline of 5% in 2025 (OnCuba News, February 2026).

The problem is converting that GDP to dollars. Cuba maintains multiple exchange rates: 24 CUP/USD for certain state enterprises, 120 CUP/USD for others, and a "floating" rate created in December 2025 that is around ~455 CUP/USD (OnCuba News). In the informal market — the only place where Cubans and businesses can actually acquire dollars — the rate reached 500 CUP/USD in February 2026, its historic low.

No economic agent in Cuba can obtain dollars at 24 or 120 pesos. The parallel exchange rate reflects the country's actual purchasing power internationally. If we apply that rate:

To put it in perspective: the average salary in Cuba in 2024 was 5,839 CUP per month (Directorio Cubano / ONEI). In parallel, that amounts to $0.53 per day. An average Cuban lives on half of what the World Bank defines as extreme poverty.

3. Comparison with neighboring countries: Cuba is the exception, not the rule

In comparable Caribbean and Central American economies, the energy bill accounts for between 5% and 10% of GDP. In Cuba, at the real exchange rate, it exceeds 200%.

Sources: oil consumption from Worldometer, EIA, TheGlobalEconomy; electric generation from Low Carbon Power; invoice/GDP from OEC, IMF, Trading Economics.

The distinguishing factor of Cuba is not the modest per capita consumption, but rather that between 60% and 70% of all its oil is burned for electricity generation because the energy matrix is overwhelmingly fossil (greater than 95%). Panama and Ecuador allocate only 10-25% of their oil for electricity as they have hydroelectric plants. In Cuba, when barrels are in short supply, gasoline prices do not rise: the country goes dark. This is exactly what is happening in February 2026, with power outages lasting over 9 hours in Havana and 2-4 hours of electricity in the provinces (Bloomberg; Al Jazeera).

4. Reexported oil: the invisible lifeblood that kept the regime alive

For more than two decades, the Cuban dictatorship survived financially thanks to a scheme that is rarely discussed: the re-exportation of subsidized oil that it received from its patrons.

Soviet Era (1977-1989): The USSR supplied about 260,000 bpd of crude oil to Cuba, while domestic consumption was only around 200,000 bpd. The surplus of approximately 60,000 bpd (about 22 million barrels per year) was resold in Western Europe at market prices, in dollars. The mechanism was a textbook case of arbitrage: Cuba bought sugar on the global market for $100 million, "sold" it to the USSR at inflated prices (in 1985, the Soviets paid 44.8¢/lb versus 4.1¢/lb in the market — a subsidy of 10.9 times), received oil paid for in non-convertible rubles, and re-exported the surplus in dollars (ASCE: Cuba's Transition to Market-Based Energy Prices; Pérez-López, The Energy Journal, 1987).

At its peak from 1983 to 1985, oil reexports generated $400-600 million annually, over 40% of all convertible currency income for Cuba — twice the contribution of sugar (Pérez-López 1987). A declassified CIA report ("Cuba: Implications of Dependence on Soviet Oil", 1982) confirmed that Cuba paid only about 40% of the OPEC price for Soviet crude oil.

When the USSR collapsed, reexports dropped to zero overnight. Oil & Gas Journal estimated the loss at $1.6 billion annually (OSTI). Total Soviet subsidies averaged $4.3 billion/year between 1986-1990, which was equivalent to 21.2% of Cuba's GNP (Cuba Platform). The result was the Special Period.

Venezuelan Era (2000-2015): Venezuela replaced the USSR with shipments of up to 105,000 bpd (peak in 2012). Cuba reactivated the Cienfuegos refinery (Library of Congress) as a joint venture CUVENPETROL to refine Venezuelan crude and sell derivatives to third parties in the Caribbean. The net subsidy element averaged 45% of the value of shipments, reaching $4.5 billion in 2012 (ASCE: Venezuela's Cuban Burden). When PDVSA collapsed, shipments fell from 105,000 bpd (2012) to 27,400 bpd (2025) (Diario de Cuba). The current energy crisis is a direct result.

The pattern is unmistakable: every time Cuba loses its oil patron, the country falls into an existential crisis. The dictatorship has never produced, on its own, the resources to cover its energy needs.

5. The impossible equation: why this model has no internal fix

If subsidies, soft loans, and unpaid debt are eliminated, and Cuba is forced to operate under market rules, the arithmetic is devastating:

Why? Three structural reasons:

First: the economy does not generate enough foreign currency. Goods exports are minimal. Tourism — which generated over $3 billion in 2019 — has severely contracted due to a combination of blackouts, shortages, and sanctions. Medical services exports (the main source of foreign currency during the Venezuelan era) depend on political agreements with allied regimes that are in decline. Export revenues in the first half of 2025 only met 91% of the plan, which is a 7% decrease compared to 2024 (Prensa Latina).

Second: the energy matrix is trapped in fuel oil. More than 95% of Cuban electricity comes from fossil fuels (Low Carbon Power). Cuba's neighbors (Panama, Ecuador, Guatemala, Costa Rica) diversified decades ago with hydroelectric, natural gas, and renewables. Cuba has plans to install 2,100 MW of solar and 700 MW of wind by 2030, but the required investment is in dollars — which it does not have.

Third: there is no access to international credit. Minister of Economy Joaquín Alonso acknowledged before parliament in July 2025 that Cuba has a "high external debt" and "does not have access to development loans" (RCM/Prensa Latina). Cuba is not a member of the IMF or the World Bank. It has unpaid external debt with nearly all its creditors. No capital markets lend to it.

6. Why only a change of regime can break the cycle

The problem in Cuba is not the U.S. embargo, although it exacerbates the situation. The issue lies in the model of centralized planning, state monopoly, multiple exchange rates, and price control that destroys value instead of creating it. Comparative evidence shows this: the Dominican Republic, with the same population and without its own oil, has a GDP of approximately $115 billion (PPP) and pays its energy bills without external subsidies. The difference is neither geographical nor demographic: it is institutional.

In order for Cuba to pay for its energy — the minimum requirement for survival — it would need, simultaneously:

Internally:

Real exchange rate unification (a single rate, close to the parallel). Liberalization of private enterprise and foreign investment with market rules. Creation of a stable framework for the respect and recognition of private property rights. Dismantling of generalized subsidies and replacement with targeted transfers.

Reform of the energy matrix with massive investment in renewables. Adjusting electricity and fuel prices.

On an external level — and here lies the key:

None of the above is feasible without access to international credit. Cuba would need a stabilization program with the IMF (as dozens of post-Soviet transition countries did), access to loans from the World Bank and the IDB, and likely direct assistance or relief from sanctions by the United States. None of these options are possible under the current political regime. The IMF does not negotiate with states that do not recognize mechanisms for independent auditing. The World Bank does not lend to countries without institutional guarantees. And the United States will not lift the embargo while Cuba remains a single-party dictatorship without free elections, press freedom, or due process.

Even with a change of regime, the transition would be brutally difficult. The post-Soviet experiences of Eastern Europe show initial contractions of 20-40% of GDP before recovery, and this was after all these countries started their transition processes with a much healthier economic base than Cuba. However, they also demonstrate that with market institutions and access to international financing, recovery does happen. Poland took 5 years. Estonia, 4. The Czech Republic, 6. All of them are now upper middle-income economies. Cuba, with its privileged geographical location (90 miles from the U.S.), its educated population, and its tourism potential, could follow a similar trajectory—but only if there is a regime change.

7. The immediate future: between collapse and inertia

As of February 2026, Cuba has 15-20 days of oil reserves (OilPrice / Kpler). Bloomberg reported a 50% reduction in the island's nighttime lighting as measured by satellite (Bloomberg). The government has implemented a 4-day workweek and suspended the supply of jet fuel, resulting in the cancellation of international flights (TIME). The dollar has surpassed the 500 CUP barrier.

Without a new oil pattern in sight—Venezuela is in collapse, Mexico has reduced shipments by 73%, and Russia contributes marginally—the dictatorship faces a historic dilemma. It can continue doing the same (seeking a new subsidy, suppressing discontent, exporting doctors in exchange for oil) and manage an increasingly deep decline. Or it can open up to the market, which implies relinquishing the political control that sustains the regime.

History suggests that it will opt for the first option as long as it can. But the arithmetic is relentless: without at least $2.5 billion annually in subsidized or financed energy, Cuba cannot keep its electrical system running. And there is no one left willing to foot that bill.

Methodological Note

Este análisis utiliza las siguientes fuentes primarias: series de consumo petrolero de la EIA vía IndexMundi y TheGlobalEconomy (1980-2014); estimaciones post-2014 de EIA, GEM.wiki, Worldometer y S&P Global; PIB de la ONEI (Cuba) y contracciones reportadas por Infobae/EFE; precios del petróleo de EIA STEO; datos de subsidios soviéticos de ASCE y Jorge Pérez-López (1987); datos venezolanos de ASCE y Hernández-Catá; comparaciones regionales de OEC, FMI y Banco Mundial. El tipo de cambio paralelo de 500 CUP/USD corresponde a febrero de 2026.

The GDP measured at the parallel exchange rate is an approximation that underestimates certain components of the economy (non-tradable services) but more accurately reflects Cuba's ability to acquire goods in international markets — which is relevant for paying for oil imports. The World Bank reports a significantly higher Cuban GDP using official exchange rates or PPP, but these do not represent the transactional reality of the country.